Economy

Economy and citizens bear the brunt of highest oil prices in three years

While the Indian citizens are yet to come to terms with the growing prices of basic essentials and commodities, the increase in oil prices has given us a double blow. In the period from June 2014 till August 2017, India reported the highest percentage increase in diesel and petrol taxes. The BJP-led NDA government has levied more taxes to up its revenue, that too also in a period of declining global crude oil prices.

Petroleum products are something which is consumed by every sector directly or directly, be it transport, irrigation, fertiliser, innumerable manufacturing processes and many such other sectors. It solves the equation because in this way, petroleum becomes the easiest source of revenue for government. By not passing on the benefits of lower oil prices to consumers, the government has in effect imposed a highly regressive measure on its citizens at a time of an economic downturn.

At a time when the agrarian crisis is deepening, with country reeling under the impact of droughts in many parts, the series of hikes in petroleum prices is only worsening the situation.

It is clear that the Modi’s government inclination is only towards the corporates, with an attitude of sheer ignorance towards farmers. Farmers are disgruntled with the way the NDA government is dealing with the agrarian issues. All achievements made in last several decades in the interest of Indian farmers have been undone in just three years of NDA rule.

Modi Government has been able to control the oil prices

While the Indian citizens are yet to come to terms with rising prices of basic and essential commodities, the increase in oil price comes as a double whammy. In a period of declining global crude prices, BJP led NDA government has employed extractive taxes to mop up more revenue for itself and not passing on the benefits of lower prices to consumers. In the period from June 2014 till August 2017, India reported the highest percentage increase in diesel and petrol taxes. In contrast, most developed economies passed on the benefits of lower global oil prices to consumers. As per the latest reports, India’s petrol price stands as the costliest compared to South Asian and South East Asian countries.

Instead of passing on lower oil prices to ease the burden on Indian society, the Modi government increased taxes to meet its fiscal deficit commitments and satisfy the demands of global investors. Today, the BJP government is charging Rs 17.33 per litre on diesel and 21.48 on a litre of petrol as central excise duty– an increase of a whopping 120% and 380% respectively. The revenue collected by BJP government from excise duty on petrol and diesel has more than doubled in 2015-16 and more than tripled in 2016-17 over 2013-14. They also helped the corporates to gain massive profits. For example, Reliance Industries became India’s most profitable company when BJP came to power. Before this, it was Indian Oil. Last fiscal year also, RIL was the most profitable company posting a net Rs 29,901 crore profit in the financial year 2016-17. The petrochemicals segment of Reliance Industries saw a sharp increase of 43.7%.

It is crystal cut clear that the NDA government makes an India which is full of miseries and graveyard for the poor and fertile land for the corporates. Mr Modi’s appeasement of the corporate sector has actually drawn the whole country into chaos and turbulence. Farmers are disgruntled with the way the NDA government is dealing with the agrarian issues. All achievements made in last several decades in the interest of Indian farmers have been undone in just three years of NDA rule. The middle class, women and youth are frustrated and distressed due to the anti people policies of the government and they pose a big question; Who is this government working for?

Demonetisation is a huge success.

The demonetisation move of the Modi government, initially dubbed as “bold”, “historic” and even “tectonic” has been finally exposed for what it actually was — an unplanned misadventure.

To start with, the RBI data revealed that 99% of the demonetised notes have returned to the system, showing that the corrupt had devised means to convert black money to white using legal means, defeating the first stated purpose of the disruptive move. Or, it means that the amount of black money held in hard cash was very low, contrary to the government’s expectations.

Further, the RBI also saw a spike in the total expenditure incurred on printing bank notes in the period of July 2016-June 2017. The figure quoted was Rs 79.65 billion as opposed to Rs 34.2 billion during 2015-16.

India has neither seen an abatement of terror-related activities and internal security threats from the Naxals, as claimed by the government.

The informal economy was hit so bad, that the World Bank remarked on it. India’s GDP came down to 5.7% in the last quarter, compared to 6.1% in the previous. Had Narendra Modi consulted former Prime Minister Dr. Manmohan Singh, then he would have advised him against the move.

Congress Vice President Rahul Gandhi was one of the first and most vocal critics of demonetisation. He had said that this was a hit delivered to the poor and marginalised. He called it an outright “scam”, and with all figures and data now at our disposal, Mr. Gandhi stands vindicated.

Faced with hard, unforgiving data, the government is now trying to put a positive spin by saying that the other objectives of demonetisation were met. However, it’s rather outlandish claims also stand summarily demolished.